Why you should aim for a 60% LTV Buy to Let mortgages
Buy to let mortgages at 60% LTV
The letting market is currently very strong and so landlords are able to make a good profit on their rents due to people taking longer to get onto the housing ladder and also those who live and work in different places and so choose to rent somewhere during the week instead of commuting. It is obvious that it is going to be better to have a larger deposit for your new property than a smaller one, but you should always make sure you have researched the market because there is more to picking a mortgage than looking for the lowest interest rate.
What to take into consideration when looking for a 60% Buy to Let mortgage
Clearly you are going to be interested in the interest rate that you will have on your mortgage as this is going to affect how large your monthly repayments are, but you should not take this figure in isolation as there are a few other things you also need to consider that can also significantly impact on the overall cost of your mortgage.
The next thing you should look at is the arrangement fee. 60% loan to value buy to let mortgages vary significantly between products with some having fees as low as around £1000, while others operate a percentage of loan fee, which means that the larger your loan, the more you will pay to take the mortgage out. The fees tend to be between 1.5% and 3.5% of the total loan, which means that on a loan of £250,000 you could pay as much as £8750 in arrangement fees alone.
Don’t forget about the fixed rate term
The length of the fixed rate period can also be a significant factor in your decision on mortgage product. A mortgage that offers you slightly higher interest rates but over a much longer time, for example five years rather than two, can provide you with a much greater level of payment stability, which could be a very wise move if there are interest rate rises being predicted for the next twelve months.
If you are struggling to figure out the best deal then you always have the option of going to a specialist buy to let mortgage broker who will take the hard work out of identifying the right mortgages and who can provide you with easy to understand cost comparisons.